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TMI Blog1991 (3) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated the following two questions : "1. Whether the Tribunal was justified and had material for holding that the assessee's case was covered by the provisions of rule 6DD(j) of the Income-tax Rules, 1962 ? 2. Whether the Tribunal's decision was vitiated in law having ignored the material fact that the assessee had no bank account and had made purchases to the tune of Rs. 4 lakhs from Messrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, the Appellate Assistant Commissioner held that the genuineness of the payments and the identity of the payees were established. He also found that one of the three payees, Shyam Fabrics, did not have bank account and, therefore, the assessee's case was covered by clause (j) of rule 6DD of the Income-tax Rules. The Department went up in appeal to the Tribunal and contended, inter alia, that S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed as a deduction. This bar applies to all and any expenditure incurred by the assessee. However, the second proviso to that sub-section says that no such disallowance shall be made if the payment is made in the circumstances as may be prescribed by the Rules. Rule 6DD has been framed in pursuance of this proviso. One of the situations where the disallowance will not be made is specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax. The only question was whether the assessee has established that the payment in cash was made in exceptional or unavoidable circumstances or for the reasons specified in sub-clause (2) of clause (j). The Tribunal has found that the amount paid in cash is quite small compared to the total amount involved in the transaction between the assessee and Shyam Fabrics and it al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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